Belzberg Reports Fourth Quarter and Annual 2010 Financial Results

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Mar 22, 2011, 09:00 ET

TORONTO, March 22 /PRNewswire-FirstCall/ - Belzberg Technologies Inc. (TSX: BLZ), a provider of technology and trading services, today announced its financial results for the three and twelve months ended December 31, 2010.

Net revenues for the fourth quarter decreased 28% to $3.6 million versus $5.0 million in the same year-ago period. The net loss for the fourth quarter was $2.0 million as compared to a net loss of $10.9 million (including unusual non-cash charges of $7.5 million and restructuring charges of $0.8 million) in the same quarter last year. Diluted loss per share for the fourth quarter was $(0.14). This compared to a loss of $(0.74) per share including $(0.56) related to restructuring and unusual non-cash charges in the same year-ago period.

The Company's financial position included cash and cash equivalents of $8.3 million and working capital of $10.3 million at December 31, 2010.


Financial Highlights	Three months ended		Twelve months ended
(in millions of dollars, except per share data)	December 31,		December 31,
(Three month periods unaudited)	2010	2009	2010	2009

Total revenue	$ 3.3	$ 7.9	$ 16.5	$ 38.2
Net revenue	$ 3.6	$ 5.0	$ 15.0	$ 23.1
Net loss	$ (2.0)	$ (10.9)	$ (7.5)	$ (16.5)
Diluted loss per share	$ (0.14)	$ (0.74)	$ (0.51)	$ (1.11)

On February 23, 2011 Belzberg announced a change in its strategic direction to refocus on its technology business. At the same time, Belzberg announced a definitive agreement to merge with Frontline Technologies Corporation ("Frontline") through an acquisition of Frontline by Belzberg. The Frontline transaction is expected to close in the second quarter of 2011 and is subject to customary closing conditions, including all necessary regulatory and stock exchange approvals and approval by the shareholders of Belzberg.

As part of this new strategic direction, Belzberg announced that it had entered into an agreement to refer most of the clients of its US execution businesses to the ConvergEx Group. It is Belzberg's intention to pay a special distribution to the holders of its existing common shares within a year of the closing of the Frontline transaction. Shareholders are invited to review the Management Information Circular, dated March 11, 2010 for additional information related to these announcements.

About Belzberg Technologies

Belzberg Technologies Inc. is a provider of trading technology and technology-based brokerage services for equities and options. Using Belzberg's suite of integrated trading tools and network connectivity, Belzberg's customers have direct access to all major North American markets. Belzberg Technologies is listed on the Toronto Stock Exchange (Ticker-BLZ) - additional information is available at www.belzberg.com.

Forward looking statement disclaimer

Except for historical information contained herein, the matters discussed in this press release are based on forward-looking statements that involve risk and uncertainty. A variety of important factors could cause results to differ materially from such statements, including but not limited to economic, competitive, governmental and technological factors affecting the company's operation, markets, products, prices and other factors.


BELZBERG TECHNOLOGIES INC. Consolidated Balance Sheets (in thousands of Canadian dollars)
		December 31,	December 31,
		2010	2009
		(Audited)	(Audited)

ASSETS
CURRENT
	Cash and cash equivalents	$ 8,319	$ 15,670
	Cash and cash equivalents segregated under regulations and other	2,143	2,805
	Cash and cash equivalents on deposit with clearing and depository organizations	1,630	1,363
	Receivable from brokers, dealers and clearing organizations	168	947
	Accounts receivable	1,718	2,405
	Prepaid expenses and other receivables	346	468
	Securities borrowed	6,186	-
	Income taxes receivable	-	12
		20,510	23,670
CAPITAL ASSETS		1,096	2,233

INVESTMENT		30	30

INVESTMENT TAX CREDITS RECOVERABLE		-	147

OTHER INTANGIBLE ASSETS, NET		77	141
		$ 21,713	$ 26,221
LIABILITIES
CURRENT
	Accounts payable and accrued liabilities	$ 2,336	$ 5,176
	Payable to customers and correspondents	1,733	1,948
	Payable to brokers, dealers and clearing organizations	-	345
	Securities loaned	6,186	-
		10,255	7,469
SHAREHOLDERS' EQUITY

CAPITAL STOCK		23,612	23,754

CONTRIBUTED SURPLUS		4,391	4,044

DEFICIT		(16,545)	(9,046)
		11,458	18,752
		$ 21,713	$ 26,221

BELZBERG TECHNOLOGIES INC. Consolidated Statements of Operations and Retained Earnings (Deficit) (in thousands of Canadian dollars, except per share amounts) (Three month periods unaudited)
		Three months ended December 31,		Twelve months ended December 31,
		2010	2009	2010	2009
REVENUE
	Equity order flow and clearing	$ 497	$ 4,353	$ 4,930	$ 21,032
	Options and futures contracts	1,724	2,192	6,956	10,815
	Subscription fees	770	1,075	3,349	4,907
	Other revenue	310	322	1,306	1,457
		3,301	7,942	16,541	38,211
	Cost of exchange and clearance fees	341	(2,916)	(1,491)	(15,097)
TOTAL NET REVENUE		3,642	5,026	15,050	23,114

EXPENSES
	Compensation and related benefits	2,097	2,881	8,891	12,824
	Telecommunication and datafeed services	1,475	1,842	6,299	7,774
	Administrative and other expenses	790	1,121	3,023	4,235
	Brokerage fees	621	840	2,223	3,144
	Amortization of capital assets	335	463	1,550	2,042
	Amortization of intangible assets	24	37	124	202
		5,342	7,184	22,110	30,221

LOSS BEFORE THE UNDERNOTED		(1,700)	(2,158)	(7,060)	(7,107)

	Restructuring expenses	-	819	(221)	1,658
	Government assistance	-	1,390	(11)	1,295
	Impairment of goodwill and intangible assets	-	1,745	-	1,745
	Foreign exchange loss	375	355	666	2,087
	Interest expense	3	3	10	25
	Interest income	(1)	(22)	(5)	(193)
		377	4,290	439	6,617

LOSS BEFORE INCOME TAXES		(2,077)	(6,448)	(7,499)	(13,724)

PROVISION FOR INCOME TAXES
	Current	-	149	-	149
	Future	-	4,304	-	2,607
		-	4,453	-	2,756

NET LOSS		(2,077)	(10,901)	(7,499)	(16,480)

RETAINED EARNINGS (DEFICIT), BEGINNING OF PERIOD		(14,468)	1,855	(9,046)	7,434

DEFICIT, END OF PERIOD		(16,545)	(9,046)	(16,545)	(9,046)

LOSS PER SHARE:
	Basic	$ (0.14)	$ (0.74)	$ (0.51)	$ (1.11)
	Diluted	$ (0.14)	$ (0.74)	$ (0.51)	$ (1.11)

WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING (in thousands)
	Basic	14,638	14,797	14,647	14,820
	Diluted	14,638	14,797	14,647	14,820

BELZBERG TECHNOLOGIES INC. Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (Three month periods unaudited)
			Three months ended December 31,		Twelve months ended December 31,
			2010	2009	2010	2009

CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
	Net earnings (loss)		$ (2,077)	$ (10,901)	$ (7,499)	$ (16,480)
	Items not affecting cash
		Amortization of capital assets	335	463	1,550	2,042
		Amortization of intangible assets	24	37	124	202
		Impairment of goodwill and intangible assets	-	1,745	-	1,745
		Unrealized foreign exchange loss (gain)	283	177	550	1,628
		Gain on sale of investment	-	-	-	(5)
		Stock-based compensation	63	61	272	279
		Future income taxes	-	4,341	-	3,045
	Changes in non-cash working capital items		1,411	7,175	(1,258)	6,430
			39	3,098	(6,261)	(1,114)

INVESTING ACTIVITIES
	Purchase of capital assets		(190)	(49)	(413)	(949)
	Purchase of intangibles		(60)	-	(60)	(7)
	Purchase of investment		-	-	-	(2)
	Proceeds from sale of investment		-	-	-	15
			(250)	(49)	(473)	(943)

FINANCING ACTIVITIES
	Repurchase of common shares		-	(65)	(67)	(97)

Effect of exchange rate changes on cash and cash equivalents			(283)	(177)	(550)	(1,628)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			(494)	2,807	(7,351)	(3,782)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			8,813	12,863	15,670	19,452
CASH AND CASH EQUIVALENTS, END OF PERIOD			$ 8,319	$ 15,670	$ 8,319	$ 15,670

CASH AND CASH EQUIVALENTS:
	Cash		$ 2,783	$ 3,795	$ 2,783	$ 3,795
	Cash equivalents		5,536	11,875	5,536	11,875
			$ 8,319	$ 15,670	$ 8,319	$ 15,670

SOURCE Belzberg Technologies Inc.